Buyer power from joint listing decision

Stephane Caprice and Patrick Rey

No 12-294, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We show that collective bargaining can enhance retailers’ buying power vis-àvis their suppliers. We consider a model of vertically related markets, in which an upstream leader faces a competitive fringe of less efficient suppliers and negotiates secretly with several firms that compete in a downstream market. We allow downstream firms to join forces in negotiating with suppliers, by creating a buyer group which selects suppliers on behalf of its members: each group member can then veto the upstream leader’s offer, in which case all group members turn to the fringe suppliers. Transforming individual listing decisions into a joint listing decision makes delisting less harmful for a group member; this, in turn enhances the group members’ bargaining position at the expense of the upstream leader. We also show that this additional buyer power can have an ambiguous impact on the upstream leader’s incentives to invest.

JEL-codes: D43 L13 L22 L42 (search for similar items in EconPapers)
Date: 2012-04, Revised 2014-07
New Economics Papers: this item is included in nep-bec and nep-com
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.tse-fr.eu/sites/default/files/medias/doc/wp/io/wp_tse_294.pdf Full text (application/pdf)

Related works:
Journal Article: Buyer Power from Joint Listing Decision (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:25765

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().